Question

Comprehensive Accounting Cycle Problem: Suppose that on January 1st, 2017, Space, Inc. has the following account balances in its general ledger: Cash: $23,950; Accounts Receivable: $18,180; Supplies: $500; Equipment: $24,000; Accumulated Depreciation-Equipment: $2,800; Accounts Payable: $6,130; Wages Payable: $1,800; Interest payable: $400; Notes Payable: $20,000; Common Stock: $18,000; Retained Earnings: $17,500. Assume all other balances are $0. During 2017, the following transactions occurred: On 1/9, paid workers $5,800 in cash. $1,800 represented expenses related to 2016. The remaining $4,000 represented expenses related to work done in 2017. On 2/28, provided $72,900 worth of services to customers. Customers paid $22,000 in cash and the remaining $50,900 of these services were provided on account. On 3/11, collected $31,800 in cash from customers in transaction b. On 4/20, purchased $630 worth of supplies on account. On 5/13, paid $2,170 to creditors for accounts payable. On 8/31, paid annual interest of $1,200 on the note. $400 of this represented interest expense related to 2016. The remaining $800 represents interest expense related to 2017. On 9/2, issued shares of common stock in exchange for $15,000 in cash. On 10/17, paid $3,000 in cash for advertising costs for the current year. On 11/16, received $8,700 in cash in advance from customers for services to be provided in December 2017 and January 2018. On 12/15, paid workers $40,000 in cash for work completed in 2017. On 12/29, paid $3,100 in cash dividends to stockholders. PART 1 – Record all 2017 transactions using Journal Entries: Record all of the above transactions for 2017 using journal entries. PART 2 – Post transactions to T-Accounts: Post all of the above transactions to T-Accounts. HINT: Don’t forget to start by entering beginning balances for each account given above.

Answer 1